Examining How Medicaid Interacts With Child Support

Medicaid is a jointly-funded, Federal-State health insurance program for low-income individuals.

Since child support is determined by which formula the states choose to employ, the remaining income, after child support is taken out, may require you to rely on Medicaid and other government programs.

Under the Affordable Care Act, Medicaid eligibility is determined based on the Medicaid household’s modified adjusted gross income. This does not include the child support that it receives.

After a divorce, many governmental institutions are forced to look at the primary custodial home as a single-parent household and attempt to navigate the economic consequences of a decision they had no part in. This is especially true for low-income households.

Because of the nature of the division of assets, financial loss is virtually inevitable. Many who previously did not need support or government-funded programs now may require them, due to the end of their previous economic situation. These people are forced to lean on programs like Medicaid, while figuring out their new life after a divorce.

In order to qualify, a recipient must still be disabled, have been eligible for a supplemental security income (SSI) cash payment for at least one month, need Medicaid in order to work, still meet all other eligibility rules, including the resource test, and have a gross earned income that is insufficient to replace supplemental security income, Medicaid, and any publicly funded attendant care.

Child support and jurisdiction

Because of the circumstances that you need to be facing in order to qualify for Medicaid, many who have endured financial losses may find themselves relying on the program. Since child support is determined by which formula the states choose to employ, the remaining income, after child support is taken out, may require you to rely on Medicaid and other government programs.

However, within the last few years, there have been changes to the way that child support interacts with Medicaid, thanks to the Affordable Care Act. According to the Office of Child Support Enforcement, child support’s role in the Medicaid program continues to evolve when parents and/or their children are eligible.

The jurisdiction of where the child support is being received plays a factor into the qualifications of Medicaid. The custodial parent receiving the child support may opt to not seek an order to provide additional coverage or enforce an existing order asking for additional coverage.

Neither parent should be ordered to seek medical coverage for their child through the Marketplace when the child is eligible for or enrolled in Medicaid, due to the fact that that would no longer make the parents eligible for the premium tax credit or cost-sharing reduction subsidies to help pay for Marketplace coverage.

Additional coverage

An order can be pursued for the custodial parent to apply for medical coverage, including the Children’s Health Insurance Program (CHIP) and Medicaid, on behalf of their children.

It is important for a custodial parent to consider how ordering additional coverage for a child eligible for Medicaid or CHIP may impact the amount of, or compliance with, the child support order. It may cause the child support amounts to be adjusted, impacting the household as a whole.

Noncustodial parent

Speaking of custody, noncustodial parents may be impacted through any potential court orders to provide additional medical coverage for a child that already is covered by Medicaid. It may impact the amount of child support noncustodial parents can pay or their willingness to comply with the child support order itself.

Not only are the ins and outs of eligibility subject to change, the definition of a Medicaid household also is subject to the changes created by the Affordable Care Act, more specifically as it concerns a specific child.

A child’s Medicaid household

According to the Office of Child Support Enforcement, a child’s Medicaid household is comprised of the child and all siblings and parents living with the child (including stepparents, and step and half-siblings). If the child’s parents are unmarried but both live in the same household as the child, the child’s Medicaid household includes both parents.

However, a noncustodial parent living away from their child in a different location is not part of the child’s Medicaid household. If the noncustodial parent claims the child as a dependent for federal tax purposes, the child is part of the noncustodial parent’s household for purposes of determining eligibility for premium tax credits and cost-sharing reductions for Marketplace insurance.

Cordell & Cordell understands the concerns men face during divorce.

Additional changes, implications

The Affordable Care Act also inspired several more changes, including a provision stating that individuals who live together may be part of different Medicaid households based on their relationship to one another. In addition, an individual’s Medicaid household may be different from his household for premium tax credits and cost-sharing reductions for Marketplace coverage.

Under the Affordable Care Act, Medicaid eligibility is determined based on the Medicaid household’s modified adjusted gross income. This does not include the child support that it receives.

This affects many low-income, noncustodial parents, as well. Those that pay child support may be eligible for Medicaid if their state of residence opted to expand Medicaid. In addition, those who would have been eligible for Medicaid if their state had expanded Medicaid are exempt from the Affordable Care Act’s individual responsibility provisions, which state that all adults and members of their family must either have minimum essential covers; have an exemption from the requirement to have minimum essential coverage; or make an individual shared responsibility payment when they file their federal income tax return.

Understanding how Medicaid impacts child support is important for custodial and noncustodial parents alike. They both need to understand how their low-income status affects their federally funded insurance and how it can interact with the child support that their shared children may rely on.

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